PayPal’s Not So Easy Credit Card Payments
You’ve probably noticed that many websites, etc. accept credit card payments via PayPal. Because PayPal is a relatively inexpensive payment gateway system, many beginner e-commerce shopping carts use them to get started. The problem is that accepting credit cards utilizing PayPal may not be as easy as you think.
If you already have a basic PayPal account and you try to make a credit card purchase on a website, you may be in for a nasty surprise. PayPal will use your bank account for funding and if you have a credit card listed as a backup, it will be grayed out, meaning that you will not be able to select the credit card for funding. PayPal wants to take the money out of your bank account, not your credit card.
The “dirty little secret” is that if you don’t use or have a PayPal account, the first time you make a purchase, you are allowed to use a credit card, one time only. PayPal makes you create an account and will later request that you add a checking account, etc. for funding future payments. The credit card will only be used as a backup in case your bank account is closed, etc.
You’re probably thinking, “well, I’ll just use another e-mail address the next time I make a credit card purchase with PayPal”. Yes, that will work and will create yet another PayPal account BUT if you attempt to use the same credit card, forget it. You will get a message from PayPal something along the lines of “this credit card is already being used by another PayPal account. For security reasons, you must use a different credit card”. So the bottom line is that in order to continue to make credit card payments using PayPal, you will need both a new e-mail address AND a new credit card that has not been used to make a PayPal purchase before.
For the above reasons, I am now recommending to all my clients that they spend the extra money for an Authorize.net or other payment gateway account. First, a buyer checking out at your shopping cart may not want to be forced into signing up for a PayPal account and second, if they make another purchase on a cart using PayPal and the same e-mail/credit card, there only option will be a withdrawal of funds from their bank account.
Buyers don’t want to be forced by PayPal to use their bank account rather than their credit card, especially if your cart prominently displays the credit card symbols. This could easily frustrate your customer resulting in a lost sale and a customer that may never return.